…provides scant information on seller
The Nigerian National Petroleum Company Limited (NNPC) paid cash amounting to $325.09 million (N140.559 billion) for the acquisition of Oando-branded retail stations and a reception jetty in Apapa, among other facilities, its latest financial statements show.
The NNPC announced in October 2022 that it had acquired OVH Energy Marketing, owner and operator of the Oando downstream assets, but did not disclose the price at which it bought it and the company that sold it.
It said the acquisition comprised over 380 additional filling stations, a reception jetty with a monthly capacity of 240,000 metric tonnes, eight liquefied petroleum gas plants, three lube blending plants, three aviation depots, and 12 warehouses.
On September 22, 2022, Helios Investment Partners announced the exit from Nigeria of OVH Energy BV, a joint venture between Vitol and Helios, following the completion of the sale of its 100 percent share in OVH Energy Marketing Limited and ASPM Limited to Nueoil Energy Limited.
Helios Investment Partners and the Vitol Group had initially bought from Oando Plc a majority stake in Oando Marketing Limited, which was renamed OVH Energy after the completion of the partial divestment that was announced by Oando in July 2016.
In its financial statements for the 16-month period ended December 31, 2022, the NNPC said it acquired on October 1, 2022 “100 percent of the voting share of Nueoil Energy Limited – a non-listed company based in Lagos, Nigeria whose principal activities are to carry on all or any of the business of oil, gas and energy – from Riverbrand Energy Limited”.
The NNPC said Nueoil Energy was incorporated on March 9, 2022, whereas no additional information was provided on Riverbrand Energy, which billed itself on its website as “a key participant in international oil markets with a significant presence in the West African region and direct access to major energy markets across Africa”.
“NNPCL acquired Nueoil Energy Limited because it presents an opportunity for NNPCL to capture a third of the retail market share and also presents the opportunity for NNPCL to acquire two blending plants which would enable the company to participate in the lubricant market on a higher scale,” it added.
According to the national oil company, the acquisition-related cost of $1.5 million being issuance fees for the letter of credit facility provided by Africa Finance Corporation are not directly attributable to the cost of investment.
“This cost has been included in administrative expenses in the statement of profit or loss and in operating cash flows in the statement of cash flows,” it said.
The NNPCL said the acquired business contributed revenues of N90.9 billion and net profit of N560 million to the group in the three months to December.
“If the acquisition had occurred on 09 March 2022 when Nueoil was incorporated, Nueoil’s revenue and net loss contribution to the group for the period ended 31 December 2022 would have been N234 billion and N1.9 billion respectively,” it said.
In July last year, the House of Representatives asked the NNPC to suspend the acquisition of OVH Energy Marketing after deliberating on a motion by some lawmakers on the “need to investigate the irregularities and alleged corruption in the Nigerian energy security provider, NNPC Retail Limited and the acquisition of OVH Energy Marketing”.
Mele Kyari, group chief executive officer of the NNPC, appeared before an ad hoc committee of the House of Representatives in September for an investigative hearing on the allegation.
He said the acquisition of OVH Energy was properly done, adding that it gave the NNPC over 30 percent control of the downstream sector with a profit of N18.4 billion in the first quarter of 2023.